Generally the least expensive source of long-term capital is ________. A) retained earnings B) preferred stock C) long-term debt D) common stock ANSWER C
Date: September 19th, 2020
In general, floatation costs include two components, underwriting costs and administrative costs. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The purpose of the debt covenant that requires maintaining a minimum level of net working capital is to ________. A) protect the lender by controlling the risk and marketability of the borrower’s security investment alternatives B) limit the amount of fixed-payment obligations C) ensure a cash shortage does not cause an inability to meet current […]
Date: September 19th, 2020
Total asset turnover commonly measures the liquidity of a firm’s total assets. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Flotation costs reduce the net proceeds from the sale of a bond whether sold at a premium, at a discount, or at its par value. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The ________ of a business firm is measured by its ability to satisfy its short-term obligations as they come due. A) activity B) liquidity C) debt D) profitability ANSWER B
Date: September 19th, 2020
The purpose of the debt covenant that prohibits borrowers from entering into certain types of leases is to ________. A) protect the lender by controlling the risk and marketability of the borrower’s security investments alternatives B) limit the amount of fixed-payment obligations C) ensure a cash shortage does not cause an inability to meet current […]
Date: September 19th, 2020
When the net proceeds from sale of a bond equal its par value, the before-tax cost would just equal the coupon interest rate. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The two categories of ratios that should be utilized to assess a firm’s true liquidity are the ________. A) liquidity and market ratios B) liquidity and profitability ratios C) market and debt ratios D) liquidity and activity ratios ANSWER D
Date: September 19th, 2020
The two basic measures of liquidity are ________. A) inventory turnover and current ratio B) current ratio and quick ratio C) gross profit margin and ROE D) current ratio and total asset turnover ANSWER B
Date: September 19th, 2020
